Thursday, August 17, 2017

Could a coalition of rural counties in Utah and a startup company develop a thorium-fueled nuclear reactor for electric power and other purposes?

According to its website, the Seven County Infrastructure Coalition is currently comprised of seven counties in eastern Utah: Carbon, Daggett, Duchesne, Emery, San Juan, Sevier, and Uintah. The website describes the Coalition’s main roles and mission as "to identify revenue-producing
infrastructure assets that will benefit the region" and "to
plan infrastructure corridors, procure funding, permit, design, secure
rights-of-way and own such facilities," with operation and maintenance possibly outsourced to third parties.

The Coalition seeks an individual or team
to act as a Project Analyst
to advise it and its member
counties on
two proposed projects, how to evaluate emerging technologies, and the
respective
project teams. One project is a thorium energy facility for producing electricity, etc.
as proposed
by Alpha Tech Research Corporation. The second project consists of hydrogen plants to be used
as fueling stations for hydrogen/electric semi-trucks as proposed by Nikola Motor Company, LLC.

Responsibilities defined in this original RFQ would include evaluation of the thorium energy and hydrogen plant projects, including an evaluation of "the feasibility and viability of projects in general, as well as the proposed projects, and determine how the Coalition and its members may use their assets to best benefit the public."

Thorium is a radioactive element that can be used in a nuclear reactor as a fuel for power production. It is distinct from the uranium-based fuel used in traditional nuclear power plants. Some limited research and development was conducted on thorium-based reactors in the twentieth century, but recent projects and all commercial reactors rely the uranium fuel cycle. Proponents of thorium reactors suggest abundant fuel supplies and reduced weapons proliferation risk compared to uranium, combined with other advantages of nuclear power such as reliable baseload generation with zero carbon emissions. Some point to Utah's mineral richness as a cost-effective source for lithium, beryllium, and other materials that could be useful in molten salt reactor resign. But crucially the technology, regulation, and business structures necessary to support a thorium reactor may not yet exist.

It's unclear how far the Utah counties' efforts can go. The coalition's stated criteria for evaluating potential projects include requiring appropriate project benefits (such as facilitating needs in rural Utah that would otherwise go unaddressed), as well as avoidance of any "fatal flaws" (such as "obvious non-Coalition sponsor that should take the lead", project success unlikely" and "low perceived benefit compared to cost.") The coalition is presumably at the stage where it is seeking expert advice to help it evaluate the thorium energy project under these criteria.

In its materials, the coalition emphasizes its expectation to rely on public-private partnerships, in part to allocate project risk to private entities with special expertise in taking those risks. But developing the first commercial thorium reactor inherently involves a variety of risks -- including developing a technology that works, securing all necessary regulatory approvals, and having business or financial arrangements in place that make the project a success. These risks could pan out in the counties' favor -- but might not. A coalition of South Carolina utilities developing what would have been the nation's first new commercial nuclear reactor recently announced a decision to suspend that project partway through construction, following years of delay, billions of dollars in cost overruns. While a thorium reactor might avoid some of these challenges, others are likely systemic to the state of the nuclear power industry from a technological, regulatory, and business perspective, and would be hard for the counties to avoid. The counties may also have more proximate opportunities to achieve similar goals, including by facilitating or developing renewable energy infrastructure.

At the same time, the coalition deserves credit for thinking proactively and considering its options. Whether the coalition continues to pursue thorium energy, or focuses on less speculative projects, the coalition's fundamental mission remains "to improve the quality of life through cooperative regional planning, increased economic opportunity, and sustainable implementation." With the right balance of risk and reward, its evaluation of proposed projects could advance that mission.

Wednesday, August 16, 2017

A Vermont municipality has proposed installing hydroelectric generating facilities along a potable water pipeline -- and under streamlined federal procedures, regulators have made a preliminary determination that the Village of Waterbury's proposed project does not need to be licensed or exempted from licensing.

The facility must generate electric power using only the hydroelectric potential of a non-federally owned conduit.

The facility has an installed capacity that does not exceed 5 megawatts.

The facility was not licensed or exempted from the licensing requirements of Part I of the FPA on or before August 9, 2013.

For this purpose, a conduit is any tunnel, canal, pipeline, aqueduct, flume, ditch,
or similar manmade water conveyance that is operated for the
distribution of water for agricultural, municipal, or industrial
consumption, and is not primarily for the generation of electricity. The primary purpose of the conduit is thus critical to qualification: the conduit cannot be primarily for power production, but must be primarily for water distribution.

If a developer proposes to develop a qualifying conduit hydropower facility, federal law generally requires that developer to file a Notice of Intent with the Commission. Commission staff will make
an initial determination (either to reject the notice of intent or to determine the
facility meets the qualifying criteria) within 15 days. If that initial determination is that the facility meets the qualifying criteria, the Commission will issue a public notice providing the public with 30 days to file motions to intervene and 45 days to provide comments contesting the qualification.

Like the Village of Waterbury, water districts and other owners of water pipelines are considering whether developing an in-conduit hydropower project makes sense for their needs. Where an existing system uses pressure relief valves, replacing a PRV with a turbine-generator can add value. In the Waterbury case, the Village appears poised to "net meter" the project's output against its own load under Vermont utility tariffs. Combining incentives -- in this case, the streamlined federal permitting process for conduit hydro plus the state net metering program -- may further enhance the value proposition.

Monday, August 14, 2017

Miles from the nearest road in the woods of the White Mountain National Forest in New Hampshire sits a backcountry hydropower project. Owned by the Appalachian Mountain Club, the Zealand Falls Hydroelectric Project No. 14657 is licensed to generate 2.5 kilowatts of power, using Whitewall Brook on federal land within the White Mountain National Forest. The project provides power to licensee Appalachian Mountain Club's Zealand Falls Hut, a year-round backcountry facility constructed in 1932 which provides overnight lodging for about 6,000 hikers and skiers. Visitors can learn about the hut's power systems first-hand, with additional information coming from public records.

According to the AMC's December 29, 2014 application to the Federal Energy Regulatory Commission for a hydropower license,
the Zealand Falls hydro unit was originally installed in 1981 with
funds from a U.S. Department of Energy demonstration grant. The
application describes its original project objective as "to provide an
alternative energy source for the AMC's Zealand Falls Hut that would a)
enhance public awareness of renewable energy sources; b) conserve fossil
fuel by decreasing propane consumption; and c) reduce the reliance on
helicopters that are used to airlift propane tanks in and out of this
backcountry hut used by the public." In 2011, the AMC replaced the
hydroelectric generator and some other systems, with the effect of
reducing water diversion.

(a) is located on a navigable water of the United States;
(b) occupies lands or reservations of the United States;
(c) utilizes surplus water or waterpower from a government dam; or
(d) is located on a stream over which Congress has Commerce clause
jurisdiction, is constructed or modified on or after August 26, 1935,
and affects the interests of interstate or foreign commerce.

The White Mountain National Forest is a federal "reservation" managed by the U.S. Forest Service. On December 29, 2014, AMC filed its application to operate and maintain its existing off-grid micro-hydro project. The Commission granted AMC's application by order dated August 12, 2015.

According to the order issuing license, the Zealand Falls Project features a natural bedrock pool from which a 3-inch-diameter intake pipe diverts water through a settling tank and penstock feeding a single turbine-generator unit with an installed capacity of 2.5 kW. Water is returned to Whitewall Brook below the turbine, about 1300 feet below the diversion. The project is licensed to operate in a run-of-river mode during the ice-free period (typically May to October).

According to the order, the levelized annual cost of operating the Zealand Falls Project as licensed is "about $585.78, or $579.98/MWh." Based on an estimated annual generation of 1,010 kilowatt-hours, the Commission found "the project would produce power valued at $117.00." This is several times higher than the cost of power delivered by the utility grid, and almost 3 times higher than the cost of producing alternative energy from a propane-fueled generator with a current average cost of propane fuel of $2.65 per gallon." At the same time, the order notes that the project may achieve public interest values beyond project economics.

Friday, August 4, 2017

Rhode Island-based Deepwater Wind is the developer of America's first commercial offshore wind project, the 30 MW Block Island Wind Farm which began commercial
operations in December 2016. Other projects in early-stage development by the company include the 90 MW South Fork Wind Farm serving Long Island and the 120 MW Skipjack Wind Farm serving Maryland.

According to Deepwater Wind, it responded to the Massachusetts clean energy RFP by proposing the Revolution Wind farm, paired with a battery storage system. The company's prime proposal features 144 MW of wind generation, coupled with a 40 MWh battery system, which it says will "help to defer the need to construct costly new
peaking generating facilities and controversial transmission lines." The project would be sited on the Outer Continental Shelf off Massachusetts, about 30 miles from the mainland and about 12 miles off Martha's Vineyard, under a lease from the federal government. It would be adjacent to Deepwater Wind’s South Fork Wind Farm. Emphasizing flexibility and scalability, as well as the ability to complete construction in one season, alternative bids submitted by the company envisioned a larger 288 MW version of Revolution Wind
and a smaller 96 MW version.

Deepwater Wind says it also intends to submit an offshore wind proposal under
a separate solicitation process under way in under Section 83C of Massachusetts law, with bids due by December 2018.

Wednesday, August 2, 2017

Two South Carolina utilities have announced their decisions to cease work on two
new
nuclear
units
under construction at the V.C. Summer Nuclear Station in Jenkinsville, South Carolina.

The project to develop Units 2 and 3 at the V.C. Summer plant was led by contractor Westinghouse Electric Co. LLC, but has experienced years of delay and billions of dollars in cost overruns. Westinghouse filed for Chapter 11
bankruptcy protection in March 2017, placing the project's future in question.

On July 31, 2017, South Carolina Electric & Gas Company (SCE&
G), principal subsidiary of
SCANA Corporation (SCANA) and owner of 55% of the plant under construction, announced that it will cease construction at the V.C. Summer site "and will
promptly
file a
petition
with the Public
Service Commission of South Carolina seeking approval of
its abandonment plan." According to a press release, "SCE&G concluded that it would
not be in the best interest of
its
customers
and
other stakeholder
s
to continue construction of the project." Factors cited in SCE&G's press release include "the additional costs to complete the Units, the
uncertainty regarding the availability of production tax credits for the project,
the amount of anticipated
guaranty settlement payments from Toshiba Corporation (Toshiba),
and other matters associated with
continuing construction
, including
the decision of
the
co-owner
of the project
,
the South Carolina Public
Service Authority (Santee Cooper), the state owned electric utility,
to
suspend
construction of
the project."

Project co-owner Santee Cooper also issued a press release on July 31 announcing its decision to suspend of the units. Santee Cooper cited "a
comprehensive analysis of detailed schedule and cost data, from both
project contractor Westinghouse Electric Co. and subcontractor Fluor
Corp., first revealed after Westinghouse, filed for bankruptcy in March." According to Santee Cooper, to date it has spent about $4.7 billion in construction and
interest costs, but its analysis shows the project would not be finished until
2024 (four years later than Westinghouse's latest estimate) for a total cost to Santee Cooper's customers of $11.4 billion.

The V.C. Sumner project was one of two new nuclear projects under commercial development in the U.S. The other project, at Plant Vogtle, was also being developed by Westinghouse. Its fate remains uncertain.

Tuesday, August 1, 2017

North Carolina's Hatteras Island experienced a power outage last week when construction activity damaged two underground transmission cables serving the island. While the damage is repaired, residents face mandatory power conservation rules and visitors have been evacuated.

Hatteras Island is a barrier island located in North Carolina's Outer Banks. While the island is relatively far offshore, it is connected to the northern Outer Banks islands by the Bonner Bridge. Hatteras Island's roughly 4,000 residents and tens of thousands more seasonal visitors are supplied electricity by Cape Hatteras Electric Cooperative, a member-owned, not-for-profit electric distribution cooperative.

According to the cooperative, on July 27 a contractor building a replacement for the Bonner Bridge "accidentally drove a steel casing through the cooperative’s transmission cables" at the south side of the bridge. The cooperative says it is taking steps toward both temporary and permanent solutions. For now, it is using a permanent diesel generator in the village of Buxton as well as temporary backup diesels to provide power to the island and is "working to expand the temporary generation service on Hatteras Island in order to accommodate a staged reentry of visitors." Meanwhile, the cooperative is working to splice the damaged underground cable and to build a new overhead transmission line, so permanent transmission service can be restored.

Calling the incident an "unprecedented complete loss of power delivery to Hatteras Island," Dare County issued a mandatory evacuation order for all visitors to Hatteras Island effective July 29, citing "life safety issues from the loss of reliable electrical power on Hatteras Island and growing uncertainty as to when repairs to the main transmission line will be completed to enable restoration of full power to the island." Estimates suggested over 10,000 visitors have been kept off Hatteras Island as a result of the evacuation order, with proper credentials required for reentry.

According to the county's website, a complete repair might take from one to two weeks.
The county notes that the on-island diesel generators "will only be able to run if load is at minimal levels and everyone is conserving." The county cites mandatory power and water conservation measures in effect, including a requirement to disconnect system circuit breakers for air conditioning systems and hot tub heaters.

Monday, July 31, 2017

As a total solar eclipse approaches for North America, California electricity regulators have launched a voluntary demand response program designed to reduce power consumption during the eclipse while solar panel output is reduced.

The eclipse will occur on August 21, 2017, and is projected to reduce solar photovoltaic production in the California ISO region by
4,194 megawatts. Taking gross load increases and estimated wind production into account, CAISO has been told to expect a net
load increase of 6,008 MW during the eclipse.

The website asks consumers to "Take the Pledge", emphasizing the value of "joining a movement of Californians who are taking action during the eclipse to
give the sun a break by saving energy and reducing GHG emissions." According to a two-page FAQ posted on the website, consumers can reduce electricity consumption by turning
off electronics when leaving, and permanently decrease electricity
consumption with energy efficiency measures. Actions suggested on the pledge website include replacing light bulbs with LEDs, reducing lighting use and electronics charging, unplugging unused appliances, and increasing air conditioning temperature setpoints by 2-5 degrees.

According to the Commission's FAQ, "There is no reason to anticipate any eclipse-related
electric service outages because of the reduced solar
generation."

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A blog about energy resources, energy policy, and their effects on society and the environment. From fossil fuels to renewable energy, electricity to natural gas and oil, traditional technologies to innovations, this blog presents a look at the past, present, and future of energy.

This blog site is published by and reflects the personal views of Todd Griset, in his individual capacity. It does not necessarily represent the views of his law firm or clients, and is not sponsored or endorsed by them. The purpose of this blog site is to assist in dissemination of information about energy policy and related issues, but no representation is made about the accuracy of the information. The information contained in this blog site is provided only as general information for education purposes, and blog topics may or may not be updated subsequent to their initial posting.

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